CAPITAL CONTRIBUTION AGREEMENT



This Capital Contribution Agreement is entered into this 9th day of June, 2005

in Beijing by and among:



CHINA NATIONAL OIL AND GAS EXPLORATION AND DEVELOPMENT CORPORATION ("CNODC")

ADDRESS: International Investment Building D, Fuchengmen Beidajie, Xicheng

District, Beijing

LEGAL REPRESENTATIVE: Wang Dongjin



CENTRAL ASIA PETROLEUM COMPANY LTD. ("CAPC")

ADDRESS: Floor 6, Communication Building, No. 2 Andelibeijie, Dongcheng

District, Beijing

LEGAL REPRESENTATIVE: Wu Enlai



PETROCHINA COMPANY LIMITED ("PETROCHINA")

ADDRESS: World Tower,16 Andelu, Dongcheng District, Beijing

LEGAL REPRESENTATIVE: Chen Geng



CHINA PETROLEUM EXPLORATION & DEVELOPMENT COMPANY LIMITED ("CPEDC")

ADDRESS: International Investment Building D, Fuchengmen Beidajie, Xicheng

District, Beijing

LEGAL REPRESENTATIVE: Wang Dongjin







WHEREAS:



1.    CNODC, a collectively-owned company, was established on 13 May 1987 in

      Beijing by law and validly existing, in compliance with laws of the

      People's Republic of China; it is mainly engaged in overseas oil and gas

      exploration and development.



2.    CAPC, a company with limited liabilities, was established on 10 July 1996

      in Beijing by law and validly existing, in compliance with laws of the

      People's Republic of China; 100% of its equity is held by CNODC

      indirectly.



3.    PetroChina, a joint stock company with limited liabilities, was

      established on 5



<PAGE>



      November 1999 in Beijing by law and validly existing, in compliance with

      laws of the People's Republic of China; the shares and American Depositary

      Shares of PetroChina are listed on the Stock Exchange of Hong Kong Limited

      and the New York Stock Exchange.



4.    CPEDC, a company with limited liabilities, was established by CNODC and

      CAPC by law on 14 March 2005 in Beijing and validly existing, in

      compliance with laws of the People's Republic of China; CNODC and CAPC

      control the company by 95%/5%.



5.    CAPC agrees to sign the Equity Transfer Agreement separately with CNODC,

      to transfer its 5% equity of CPEDC to CNODC.



6.    CNODC agrees to transfer the Transferred Assets (see Article 1.9 for the

      definition) held by CNODC, directly or indirectly, to CPEDC Group for free

      of charge. CPEDC agrees, when all closing conditions specified in Article

      3.1 herein are satisfied or considered as satisfied according to Article

      3.2 herein, to make capital increase, and PetroChina also agrees to

      subscribe for all additional registered capital due to CPEDC's capital

      increase ("this Transaction"). Upon the completion of this Transaction,

      PetroChina will hold 50% equity of CPEDC.



NOW, THEREFORE, in consideration of equality and mutual benefit, through

friendly negotiation, and as per relevant laws and regulations of the People's

Republic of China, the parties agree upon this Transaction as follows:





                     ARTICLE 1 DEFINITION AND INTERPRETATION



Unless specified otherwise in this agreement, the terms and expressions herein

have the following meanings:



1.1.  THE AGREEMENT: means the Capital Contribution Agreement and any revision

      and modification hereto duly agreed and executed by and among the parties

      hereto in writing from time to time.



1.2.  REGISTERED CAPITAL SUBSCRIPTION: means that PetroChina subscribes for the

      additional registered capital of CPEDC for the purpose of this

      Transaction, i.e. RMB 50 million, to obtain 50% equity of CPEDC.



1.3.  CLOSING: means that PetroChina pays the consideration specified in Article

      5 herein when all closing conditions specified in Article 3.1 herein are

      satisfied or considered as satisfied according to Article 3.2 herein.



                                       1



<PAGE>



1.4.  CLOSING DATE: means the date when PetroChina pays the consideration

      specified in Article 5 herein when all closing conditions specified in

      Article 3.1 herein are satisfied or considered as satisfied according to

      Article 3.2 herein.



1.5.  BASE DATE: means 31 December 2004.



1.6.  RELATED PERIOD: means the period from 1 January 2005 to the Closing Date

      (including).



1.7.  MAJOR PROCEEDINGS: means any pending lawsuit, arbitration, administrative

      appeal or other legal processes related to Transferred Assets arising

      before the Closing Date, involving a value of more than US$3 million

      individually.



1.8.  SPECIAL REGIONS: means Sudan, Syria, Iran, Burma, and Iraq.



1.9.  TRANSFERRED ASSETS: means all assets and liabilities located in areas

      other than Special Regions, originally owned by CNODC whether directly or

      indirectly, and listed in the Appraisal Report. See Exhibit 1 for

      Transferred Assets-related projects and Exhibit 2 for Transferred

      Assets-related companies.



1.10. EXAMINING AND APPROVING AUTHORITIES: mean all foreign and domestic

      governmental examining and approving authorities that are entitled to

      approve or authorize this Transaction and other actions related thereto.



1.11. APPRAISAL REPORT: means the report made by China Enterprises Appraisals

      for the assets and liabilities of CPEDC and/or Transferred Assets on Base

      Date.



1.12. CPEDC GROUP: means CPEDC and its owned companies listed in Transferred

      Assets.



1.13. CNPC: means China National Petroleum Corporation. It is the controlling

      parent company of CNODC and PetroChina.



1.14. FORCE MAJEURE: means war, natural disaster and any other unforeseen and

      inevitable event that cannot be controlled by the parties hereto.



1.15. PREEMPTION RIGHTS: means that once CNODC or its controlling companies sell

      their owned assets or equities in relation to oil/gas exploration,

      development, production, pipelines, refining and chemical businesses, or

      CPEDC issues a notice to CNODC or its controlling companies requesting for

      purchase of aforesaid assets or equities, as negotiated by the parties,

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